Members of the Pakistan’s Finance Ministry are all set to knock their heads together in what seems to be another failure in balancing the government books. To present and ruminate over the national kitty, Prime Minister Nawaz Sharif has recently advised President Mamnoon Hussain to summon National Assembly and Senate sessions this week. Unsurprisingly, various budget proposals coming out of the government quarters, once again, undermine the state’s ability to fight itself out of its recurrent fiscal deficits. A spate of tax exemptions and tax relief are on the menu. Chief amongst them is the increase in the income tax exemption limit from the current Rs 400,000 to Rs 500,000. The general sales tax being the leading revenue spinner for the state may see another moderate increase. Another musing is the possible tax relief given to the stock market, to encourage fresh listings. Such proposals obviously mean that the national purse will remain mired by the usual structural weaknesses, including a narrow tax base, massive tax evasion and administrative incompetence. Despite recent initiatives to improve debt situation, Pakistan’s present tax to GDP ratio stands at a dispiriting 12.4 percent — one of the lowest in the world. This amounts to over 60 percent increase in nominal terms since 2013. Unless all major sectors of the economy pay off their genuine tax liabilities, the tax to GDP ratio will remain under pressure. Recurrent budget deficits have been a common theme. Pakistan’s average budget deficit over the last ten years has been 6.4 percent — more than the average 4.7 percent from 1990 to 2007. Fiscal consolidation therefore has been a monumental task for successive democratic regimes. As the incumbent government runs dry of sufficient revenue streams to fund its social development programmes, Pakistan’s education and health sectors will remain major casualties. The upcoming budget is therefore, unlikely to offer much respite for those on the breadline. It will be the usual mixture as before — good for some, bad for the rest. Sadly, without radical reforms in achieving sound fiscal consolidation, there will be little fiscal stability in the near term. Although never a permanent solution, but some foreign aid and the ongoing Renminbi injection from across the Himalayas should be a shock absorber. *